Bitcoin Rallies Up To $8600 Following FED’s Comments

Bitcoin Rallies Up To $8600 Following FED’s Comments
Written by:
Michael Harris
10th October 2019
Updated: 11th March 2020

The Federal Reserve (FED) made an announcement on Tuesday that there are plans of printing more money for the expansion of bank reserves. In principle, such a move is always accompanied by a potential to spark inflation.

As of 19:35 GMT, CoinDesk reported a hike in Bitcoin price that has rallied to around $8600 level. The month of September primarily brought bad news to the Bitcoin that dropped from over $10,000 to a low of around $7800. Such a sharp decline was linked to huge margin calls (Bitmex exchange) as per the analysts. While there were speculations of further downward movement, the price previously stabilized around $8100 level. Yesterday’s surge to $8600 has marked the highest for Bitcoin in the past month.

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FED’s Plans Of Quantitative Easing

The upward rally has been attributed to Mr. Powell’s (Chairman FED) statement that it is a need of the hour to expand the balance sheets another time this year in order to protect the U.S from suffering in the financial markets. He has further accentuated the plans of buying securities in the days to come to keep the markets flooded with money and secure short-term lending markets’ optimal functioning. The financial experts have opinionated that the move is synonymous with 4th round of QE (quantitative easing). From the year 2009 to 2015, three rounds of QE have been conducted by the Federal Reserve.

San Francisco based investment firm that primarily deals in cryptocurrencies, Bitbull Capital’s CEO, Mr. Joe DiPasquale was reported saying that leniency in monetary policy by FED is usually received well by the Bitcoin index, in a recent phone interview. He further quoted the June 2019 example of when FED announced its interest rate-cut policy for the first time this year that stirred up the Bitcoin market with price surging to a yearly high of around $13,000.

UNICEF May Have Fueled Bitcoin’s Price Hike

According to Mr. David Martin, Chief Investment Officer at BlockForce Capital, Wednesday’s hike in Bitcoin price may also be linked with UNICEF (United Nations Children’s Fund). In a recent announcement, UNICEF declared that it intends to launch a global fund that will allow the donors to make donations via Bitcoin and Ethereum. Considering that Ethereum rallied up to $190.82 (6.4%) following the announcement, Bitcoin’s hike may have been fueled by the same, according to the crypto experts.

With the Securities and Exchange commission currently considering the Bitwise Investment’s proposal of a Bitcoin ETF, and the stock-to-flow ratio of the cryptocurrency still to be factored in the price, there are speculations that Bitcoin could surge significantly higher in the year 2020.

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